VMG seals $340m snacking exit

The firm has sold snack company Snack Factory, which VMG purchased with capital from its debut fund in 2009. The firm’s portfolio has generated annual net revenue growth of 45%.

California-based VMG Partners has sold branded snack food business Snack Factory to Snyder’s-Lance for $340 million.

Snack Factory was founded in 2004 and makes pretzel-shaped crackers under the Pretzel Crisps brand. VMG acquired the business in 2009, investing from its debut fund that raised $325 million 2007. The transaction is expected to close during the fourth quarter of 2012.

VMG focuses on branded consumer products in the lower mid-market. The firm’s portfolio companies include snack-maker Robert’s American Gourmet Foods, whose specialty brands include Pirate’s Booty, and nutritional bar company KIND Snacks. The firm has invested in a number of companies outside of the food sector, however.
“I don't think it’s specific to food,” VMG partner and co-founder Kara Cissell-Roell told Private Equity International. “I think it's pet, household, personal care, lifestyle, etc.”

VMG’s entire portfolio has grown net revenues at a rate of 45 percent per year, according to Roell. The firm has made one investment from its $375 million second fund that closed in 2011, acquiring popcorn maker Kernel Seasons.

“We have lots of dry powder and are actively looking for brands just like Pretzel Crisps, KIND, Kernel Seasons, Pirate’s Booty and Waggin’ Train,” Cissell-Roell said.

In 2010, the firm sold Waggin’ Train, a marketer of all-natural pet treats, for a reported $450 million. The exit generated a 5.2x return multiple. VMG also has investments in Colorscience, a luxury mineral makeup brand; and Timbuk2, a manufacturer of carry-all bags and accessories.

Branded consumer companies have been prime targets for buyers in recent months. California-based Brentwood Partners sold three portfolio companies during the month of June: display advertising business Array Marketing, apparel and accessories company Filson and equestrian footwear and apparel manufacturer Ariat.

Consumer focused firms have also attracted strong interest from limited partners recently. Last month, LNK Partners closed its second consumer and retail-focused fund on its $400 million target after receiving “strong support from existing investors” and a “high level of interest from new investors”, according to a company statement.
California-based VMG was launched in 2005 when five of VMG’s current partners spun out of private equity firm The Shansby Group.